The Reserve Bank of Australia (RBA) left the cash rate on hold once again this afternoon, at 2 per cent, which came as little surprise to most, with the finder.com.au survey finding that 31 of the 32 experts asked had expected as much.

Money Expert at finder.com.au Michelle Hutchison says that while the record low rates have been welcomed by many borrowers, they’re not here to stay.

“The finder.com.au Reserve Bank Survey has found that it’s not a matter of ‘if’ the cash rate will rise but, rather, ‘when’.

“However, there’s no need to panic and borrowers should use this time to do their research and scan the market to ensure they’re getting the best rate possible. Also, now’s the time to prepare for future rate hikes by making extra repayments while you can.

The survey found that 19 experts (59 per cent) expect auction clearance rates to stabilise at the current level, while one expert – Peter Boehm of onthehouse.com.au – believes auction clearance rates will boost even higher this mortgage season.

“However, more than one in three experts (11 experts or 34 per cent) expect auction clearance rates to fall, despite mortgage season being traditionally billed as the hottest time to buy and sell,” Hutchison says, adding that buyers who are planning to wait until the property market settles may want to think again.

CoreLogic RP Data’s August housing market data along with recent data on investor credit growth would have been welcome news to the board when they were deliberating on the rate setting. 

Head of research Tim Lawless says: “The rate of capital gain apparently eased across the housing market in August. After capital city dwelling values increased by more than two per cent in both June and July, capital city dwelling values grew by a much more sustainable 0.3 per cent in August. 

“Additionally, recent credit data released by the RBA shows the annual pace of growth in investment credit slipped from a recent annual high of 11.1 per cent to reduce back to 10.8 per cent in July. 

“The slower month of housing data may indicate that the housing boom in Sydney and Melbourne is starting to slow and investment lending is starting to moderate in line with APRA guidelines.  

“While the Sydney and Melbourne housing markets don’t need any further stimulus, other capital cities as well as regional markets have recorded much more sustainable growth rates. In fact, dwelling values declined across four of the eight capital cities over the month of August and three capital cities – Perth, Darwin and Canberra – have recorded a decline in dwelling values over the past 12 months. 

“Home owners and prospective buyers across Australia will welcome the sustained low interest rate setting, which will continue to spur buyer demand and help offset the effects of softer economic conditions outside Sydney and Melbourne.”

Hutchison has a message for buyers: “Regardless of when you’re buying, ditch emotion and consider what the future holds for the cash rate.

http://www.apimagazine.com.au/api-online/news/2015/09/cash-rate-held-for-another-month